Frank Bennett v. Navy Federal Credit Union, Equifax Information Services and TransUnion, LLC

• Court: District Court, S.D. California
• Decided: November 20, 2025
• Docket: 3:24-cv-00295
• Status: Unknown

Opinion

1 2 3 4 5 6 7 8 9 10 UNITED STATES DISTRICT COURT 11 SOUTHERN DISTRICT OF CALIFORNIA 12 13 FRANK BENNETT, Case No.: 3:24-CV-295 W (WVG)

14 Plaintiffs, ORDER GRANTING DEFENDANT’S 15 v. SUMMARY-JUDGMENT MOTION [DOC. 44] 16 NAVY FEDERAL CREDIT UNION, EQUIFAX INFORMATION 17 SERVICES and TRANSUNION, 18 LLC, 19 Defendants. 20 21 Pending before the Court is Defendant Navy Federal Credit Union’s summary- 22 judgment motion. Plaintiff Frank Bennett opposes. The Court decides the matter on the 23 papers submitted and without oral argument. See Civ. L.R. 7.1(d.1). For the following 24 reasons, the Court GRANTS the motion [Doc. 44]. 25 26 I. FACTUAL BACKGROUND 27 This lawsuit arises out of two loans Plaintiff Frank Bennett obtained from 28 Defendant Navy Federal Credit Union (“NFCU”) in July 2019. (Bennett Decl. [Doc. 46- 1 1] at ¶¶ 6, 8, 9.) The first was a personal loan for $9,500 with an interest rate of 17.75%. 2 (Jt. State. [Doc. 50] at No. 8; see also Bennett Decl. at ¶ 8.) The loan was to be paid back 3 over a term of 60 months with monthly payments of $240.51. (Jt. State. at No. 8, 9.) The 4 second loan was for an automobile and was for $25,063.48 with an interest rate of 9.48%. 5 (Jt. State. at No. 27; see also Bennett Decl. at ¶ 9.) The auto loan was to be paid back 6 over a term of 72 months with monthly payments of $466.05. (Jt. State. at No. 27.) 7 8 A. Bennett defaults on both loans. 9 Bennett defaulted on both loans after failing to make the required monthly 10 payments. (Jt. State. at No. 7.) On the personal loan, Bennett made the first two payments 11 then failed to make payments for the next three months. (Id. at Nos. 11, 12.) Beginning in 12 December 2019, the status on Bennett’s credit reporting account was changed to code 13 “71,” indicating the loan was 30 to 59 days past due. (Id. at Nos. 13, 14.) 14 In January 2020, Bennett made a double payment on the personal loan. (Jt. State. 15 at No. 15.) Because he had missed three payments, the loan continued to be reported as 16 past due. (Id.) Bennet then made a full payment in February 2020, a partial payment in 17 March, a full payment in April and another partial payment in May. (Id. at Nos. 16, 17.) 18 Based on this payment history, by approximately May 2020, NFCU was reporting the 19 loan was 60 days past due to the Credit Reporting Agencies (“CRAs”). (Id. at No. 18; 20 Paulson Decl. [Doc. 44-2] ¶¶ 24, 25.) 21 Bennett missed his June and July 2020 payments and NFCU reported the personal 22 loan as 90 days and 120 days past due, respectively. (Jt. State. at No 19.) In August 23 2020, Bennett made a large payment that brought the loan to 90 days past due, which is 24 how the loan was reported to the CRAs. (Id. at No. 20.) In November 2020, NFCU 25 “charged off” the loan, which was now 120 days past due.1 (Id. at Nos. 20, 21.) 26 27 28 1 A loan is “charged off” when NFCU determines it is unlikely to be collected. (Paulson Decl. ¶ 6.) 1 After the personal loan was charged-off, Bennett and NFCU entered a repayment 2 plan in December 2020. (Jt. State. at No. 22.) On January 26, 2023, NFCU sent Bennett a 3 letter confirming the repayment plan for the remaining balance of $6,024.21. (Paulson 4 Decl. at ¶ 31, Ex. B.) The letter provided: 5 Navy Federal Credit Union agrees to an installment plan consisting of 40 monthly payments of $150.00 each, with the final payment to be received no 6 later than 05/01/2024. The outstanding default will continue to be reported 7 to the credit bureaus until the agreement is complete and satisfied, at which time we will update the credit bureaus with the new information. 8 9 You must ensure we receive all required payments, and in the manner outline above. Once we receive all the required payments and the funds 10 clear, we will consider the agreement complete. Upon completion, Navy 11 Federal will send you a letter confirming resolution of the account for your records, an update will be sent to the major credit bureaus that the account 12 has been paid in full, and no further collection activities will occur. If we do 13 not receive all the payments as agreed upon, we will not consider the repayment agreement complete and collection activities on your account will 14 continue. 15 (Paulson Decl. at Ex. B, emphasis added.) 16 As for the auto loan, Bennett immediately defaulted by failing to make his first 17 payment and then made partial payments for the next four months. (Jt. State. at Nos. 28, 18 29.) Because the payments were insufficient to bring the loan current, the account status 19 was changed to code “71” in December 2019, indicating it was 30 to 59 days past due. 20 (Id. at No. 30.) Bennett then made payments in December 2019 for $646.30, in February 21 2020 for $699 and in March 2020 for $233. (Id. at Nos. 31–33.) The payments were 22 insufficient to bring the loan current so NFCU continued to report the loan as 30-days 23 past due. (Id. at No. 34.) Bennet then made full payments of $466.05 in April 2020 and 24 May 2020, a partial payment of $433 in July 2020, and another payment in April 2021. 25 (Id. at Nos. 35–38.) From July through October 2021, NFCU accurately reported the loan 26 as 60, 90, 120 and 150 days late, respectively. (Id. at No. 39.) In November 2021, NFCU 27 charged off the loan. (Id. at No. 40.) 28 1 After the auto loan was charged-off, Bennett and NFCU entered a repayment plan 2 for the auto loan, which required him to make monthly payments of $350 until the loan 3 was paid off. (Jt. State. at No. 42.) Like Bennett’s repayment plan for the personal loan, 4 on March 16, 2024, NFCU sent Bennett a letter confirming that “[t]he outstanding default 5 will continue to be reported to the credit bureaus until the agreement is satisfied, at which 6 time we will update the credit bureaus with the new information.” (Paulson Decl. at ¶ 47, 7 Ex. K.) The letter also warned: “Please note collection activities will continue if you fail 8 to maintain an arrangement to resolve the account.” (Id.) 9 10 B. Bennett disputes NFCU’s reporting on his credit report. 11 After the repayment plans were entered, NFCU continued to report that the 12 personal and auto loans were charged off. (Bennett Decl. ¶¶ 20, 21.) Beginning on 13 approximately January 4, 2023, Bennett submitted disputes to the CRAs related to 14 NFCU’s reporting on his loans. (Id. ¶ 22.) 15 If a consumer disagrees with the credit reporting on a loan or credit card account, 16 the consumer can submit a dispute to a CRA. (Jt. State. at No. 53.) The CRA can then 17 report the dispute to the credit furnisher —i.e. NFCU— through an Automated Credit 18 Dispute Verification. (Id. at No. 54.) The credit furnisher then investigates the dispute 19 and, if necessary, updates or corrects the credit reporting information. (Id. at No. 55.) 20 Regarding Bennett’s disputes, NFCU investigated by reviewing information 21 Bennett provided to the CRAs that was passed on to NFCU and information in NFCU’s 22 system regarding the accounts. (Paulson Decl. ¶¶ 53, 57.) NFCU also evaluated whether 23 it needed to analyze additional information to fully assess the dispute, and made a 24 determination regarding the accuracy of its reporting. (Id. at ¶ 57.) NFCU confirmed that 25 both the personal loan and the auto loan had been charged off as a loss on November 25, 26 2020, and, therefore, the reporting was accurate and complete. (Id. at ¶ 58.) 27 // 28 1 C. Bennett files this lawsuit. 2 On February 14, 2024, Bennett filed this lawsuit against Defendants NFCU, 3 Equifax Information Services LLC and Trans Union LLC.2 The First Amended 4 Complaint alleges two causes of action for (1) violation of the Federal Credit Reporting 5 Act (“FCRA”), 15 U.S.C. § 1681s-2(b) and (2) violation of the California Consumer 6 Credit Reporting Agencies Act (“CCCRAA”), Cal. Civil Code § 1785.1. NFCU now 7 moves for summary judgment on both causes of action. 8 9 II. LEGAL STANDARD 10 Summary judgment is appropriate under Rule 56(c) where the moving party 11 demonstrates the absence of a genuine issue of material fact and entitlement to judgment 12 as a matter of law. See Fed. R. Civ. P. 56(c); Celotex Corp. v. Catrett, 477 U.S. 317, 322 13 (1986). A fact is material when, under the governing substantive law, it could affect the 14 outcome of the case. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986); Freeman 15 v. Arpaio, 125 F.3d 732, 735 (9th Cir. 1997). A dispute about a material fact is genuine if 16 “the evidence is such that a reasonable jury could return a verdict for the nonmoving 17 party.” Anderson, 477 U.S. at 248. 18 The party seeking summary judgment bears the initial burden of establishing the 19 absence of a genuine issue of material fact. Celotex, 477 U.S. at 323. The moving party 20 can satisfy this burden in two ways: (1) by presenting evidence that negates an essential 21 element of the nonmoving party’s case; or (2) by demonstrating that the nonmoving party 22 failed to make a showing sufficient to establish an element essential to that party’s case 23 on which that party will bear the burden of proof at trial. Id. at 322-23. “Disputes over 24 25

26 27 2 On September 30, 2024, a joint motion to dismiss Defendant Equifax Information Services LLC was granted [Doc. 35]. On October 22, 2024, a joint motion to dismiss Trans Union LLC was granted [Doc. 28 39]. 1 irrelevant or unnecessary facts will not preclude a grant of summary judgment.” T.W. 2 Elec. Serv., Inc. v. Pac. Elec. Contractors Ass’n, 809 F.2d 626, 630 (9th Cir. 1987). 3 “The district court may limit its review to the documents submitted for the purpose 4 of summary judgment and those parts of the record specifically referenced therein.” 5 Carmen v. San Francisco Unified School Dist., 237 F.3d 1026, 1030 (9th Cir. 2001). 6 Therefore, the court is not obligated “to scour the record in search of a genuine issue of 7 triable fact.” Keenan v. Allen, 91 F.3d 1275, 1279 (9th Cir. 1996) (citing Richards v. 8 Combined Ins. Co., 55 F.3d 247, 251 (7th Cir. 1995)). 9 If the moving party meets its initial burden, the nonmoving party cannot defeat 10 summary judgment merely by demonstrating “that there is some metaphysical doubt as to 11 the material facts.” Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 12 586 (1986); Triton Energy Corp. v. Square D Co., 68 F.3d 1216, 1221 (9th Cir. 1995) 13 (citing Anderson, 477 U.S. at 252) (“The mere existence of a scintilla of evidence in 14 support of the nonmoving party’s position is not sufficient.”). Rather, the nonmoving 15 party must “go beyond the pleadings and by her own affidavits, or by ‘the depositions, 16 answers to interrogatories, and admissions on file,’ designate ‘specific facts showing that 17 there is a genuine issue for trial.’” Celotex, 477 U.S. at 324 (quoting Fed.R.Civ.P. 56(e)). 18 When making this determination, the court must view all inferences drawn from 19 the underlying facts in the light most favorable to the nonmoving party. See Matsushita, 20 475 U.S. at 587. “Credibility determinations, the weighing of evidence, and the drawing 21 of legitimate inferences from the facts are jury functions, not those of a judge, [when] he 22 [or she] is ruling on a motion for summary judgment.” Anderson, 477 U.S. at 255. 23 24 III. ANALYSIS 25 NFCU raises two grounds for summary judgment. First it argues that its reporting 26 on Bennett’s loans was not inaccurate or misleading. (P&A [Doc. 44-1] at 10:2–3.) 27 Second, it argues its investigation was reasonable. (Id. at 10:3–6.) Because the Court 28 1 finds as a matter of law that NFCU’s reporting was neither inaccurate nor misleading, 2 summary judgment is required as to both causes of action. 3 4 A. Violation of the FCRA 5 To prevail on a cause of action for violation of section 1681s-2(b) of the FCRA, a 6 plaintiff must prove: “(1) Defendant is a ‘furnisher’; (2) Plaintiff notified the CRA that 7 Plaintiff disputed the reporting as inaccurate; (3) the CRA notified the furnisher of the 8 alleged inaccurate information of the dispute; (4) the reporting was in fact inaccurate; and 9 (5) Defendant failed to conduct the investigation required by § 1681s-2(b)(1).” Miller v. 10 Westlake Servs. LLC, 637 F. Supp. 3d 836, 848 (C.D. Cal. 2022) (citing Gorman v. 11 Wolpoff & Abramson, LLP, 584 F.3d 1147, 1153 (9th Cir. 2009)). However, before a 12 court considers the reasonableness of an investigation, “the consumer must make a 13 ‘prima facie showing’ of inaccuracy in the agency’s reporting.” Gross v. CitiMortgage, 14 Inc., 33 F.4th 1246, 1251 (9th Cir. 2022) (extending requirement to furnishers of 15 information). The reason is that “if there is no inaccuracy, then the reasonableness of the 16 investigation is not in play.” Id. 17 Bennett argues his credit report is inaccurate because NFCU reported his personal 18 and auto loans were charged-off. (Opp’n [Doc. 46] at 6:20–21.) Bennett contends the 19 repayment arrangements for his loans “superseded the original loan agreements. . . .” (Id. 20 at 7:26–27.) Because the “superseding contracts governed Bennett’s new monthly 21 obligations to NFCU” and, according to Bennett, because he was current on those 22 obligations, NFCU’s reporting that the loans were charged off is inaccurate. (Id. 8:9–17.) 23 In its reply, NFCU disputes that the repayment arrangements superseded the terms 24 of the original loans. (Reply [Doc. 49] 4:7–12.) Additionally, NFCU points out that the 25 letters confirming the repayment arrangements informed Bennett that the “outstanding 26 default will continue to be reported to the credit bureaus until the agreement is complete 27 and satisfied. . . .” (Id. 5:1–11.) 28 1 Based on the parties’ arguments, the central issues is whether the repayment 2 arrangements modified or superseded the original loan agreements so that if Bennet was 3 current on those payments, NFCU’s reporting was inaccurate. While neither party has 4 cited an analogous Ninth Circuit case, an analogous Eleventh Circuit case provides 5 guidance. 6 In Felts v. Wells Fargo N.A., 893 F.3d 1305 (11th Cir. 2018), plaintiff Christina 7 Felts refinanced her home with a loan serviced by defendant Wells Fargo Bank. As the 8 servicer of the loan, Wells Fargo was responsible for collecting Felts’ mortgage payments 9 of $2,197.38 and reporting certain information to CRAs. After Felts lost her job, she 10 contacted Well Fargo to discuss a revised payment plan for the loan. Eventually, Felts 11 enrolled in an unemployment forbearance plan (the “Plan”) that required her to make 12 monthly payments of $25 during the Plan period. Id. at 1310. In a letter Wells Fargo sent 13 to Felts about the Plan’s terms, Felts was informed that the regular mortgage payments 14 would continue to accrue and be due at the end of the Plan period, but Felts could then 15 apply for repayment assistance for the accrued amount. Id. Before Felts entered the Plan, 16 this condition was also mentioned in a telephone call with a Wells Fargo employee who 17 told Felts: “after the Plan ended, Wells Fargo would ‘take all that past due and they’ll just 18 tack it on to the end of the loan.’” Id. In response, Felts asked if her payments would still 19 be considered late, to which the representative responded “‘[y]es. Because it’s not the 20 contractual payment.’” Id. 21 After successfully completing the Plan, Felts sold her home and paid off the 22 remaining balance on the loan. She then applied for another loan to buy a new house but 23 was denied because Wells Fargo had reported her loan as “delinquent” and “past due” 24 with an outstanding balance of $22,308. Id. at 1310. Felts submitted disputes to the 25 CRAs, which reported them to Wells Fargo. After investigating the disputes, Wells Fargo 26 reported the account status “as ‘paid in full’ and changed the ‘amount past due’ [to] 27 $0.00.” Id. at 1311. However, Wells Fargo did not correct the delinquency and reported 28 that Felts’ account was past due during the Plan period because during that time “the 1 account was considered past due for each of those months because Felts did not make her 2 full contractual payment.” Id. 3 Felts filed a lawsuit against Wells Fargo for violation section 1681s-2(b) and Wells 4 Fargo moved for summary judgment. The District Court granted the motion concluding 5 that “there was no genuine factual dispute as to the accuracy of the information Wells 6 Fargo reported to the CRAs because there was no evidence of any factual inaccuracy or 7 materially misleading statement.” Id. 8 On appeal, Felts argued the District Court erred in finding that she failed to show 9 Wells Fargo reported inaccurate information because she made all the required $25 10 monthly payments. Id. at 1313. According to Felts, “under the explicit terms of the Plan, 11 she was not required to pay the full amount due on the Note during the Plan period” and 12 cited as support Wells Fargo’s confirming letter, which stated that “[t]he total accrued 13 amount then becomes due and is your responsibility to pay after you complete the Plan, 14 or when you become fully employed.” Id. at 1314 (emphasis in original). Because the 15 amount accrued was not due until after the Plan period, Felts argued she was not 16 delinquent on her debt and pointed to the definition of “delinquent,” which means “not 17 paying a debt as agreed.” Id. 18 The Eleventh Circuit rejected Felts’ argument for a number of reasons. Relevant to 19 this case, the court explained that Felts misconstrued Wells Fargo’s reporting obligations. 20 According to the Court, 21 Wells Fargo was not required to furnish information to the CRAs regarding every agreement it formed with Felts. Instead, Wells Fargo was required to 22 furnish information to the CRAs regarding Felts’ payment status and history 23 for one agreement in particular: the Note Felts signed for the Loan. The CRAs requested, and Wells Fargo submitted, information regarding Felts’ 24 compliance with her obligation to make installment payments in accordance 25 with the Note she signed. Felts’ apparent compliance with the terms of a second, separate agreement she entered into with Wells Fargo—the Plan— 26 has no bearing on the accuracy of the information Wells Fargo reported to 27 the CRAs regarding Felts’ compliance with the terms of her first, original 28 1 agreement—the Note—unless the Plan legally modified the terms of the Note. 2 3 Id. at 1314. Regarding whether the Plan modified the terms of the Note, the court found 4 Felts failed to identify any evidence supporting a modification. Id. In addition, the court 5 found Wells Fargo’s correspondence with Felts established the Plan did not modify the 6 Note. The Plan letter “explicitly stated that Felts’ payments under the Plan did not satisfy 7 the amounts ‘owed’ under the Note,” which was inconsistent with a modification of the 8 Note and confirmed the opposite. Id. at 1315. Further, the court relied on the Wells Fargo 9 employee’s telephone conversation with Felts, during which Felts was told that “her 10 payments would ‘still show[] up as a late payment’ because ‘it’s not the contractual 11 payment.’” Id. 12 Although Felts is an Eleventh Circuit case, in the absence of controlling Ninth 13 Circuit authority, this Court is persuaded by the court’s reasoning. Here, there is no 14 dispute that when Bennett entered the repayment plans, he was delinquent on both his 15 personal loan and automobile loan. There is also no dispute that the amounts due under 16 the repayment plans were less than the amounts due under the loans and thus insufficient 17 to bring the loans current. Accordingly, NFCU’s reporting that the loans were charged off 18 was not inaccurate. 19 Like the plaintiff in Felts, Bennett’s argument that NFCU’s reporting was 20 inaccurate because he was current on the repayment arrangements misconstrues NFCU’s 21 reporting obligation. It was not “to furnish information to the CRAs regarding every 22 agreement it formed with [Bennett]” but instead to report Bennett’s compliance with the 23 terms of the original personal and auto loans. Felts, 893 F.3d at 1314. Thus, Bennett’s 24 alleged compliance with the terms of the separate repayment plans “has no bearing on the 25 accuracy of the information” NFCU reported about his compliance with the terms of the 26 original loans “unless the [repayment plans] legally modified the terms of the [original 27 loans].” Id., 893 F.3d at 1314. Again, like Felts, Bennett has provided no evidence 28 remotely suggesting that the repayment plans modified the terms of the original loans. To 1 the contrary, NFCU’s correspondence to Bennett advising him that the “outstanding 2 default will continue to be reported to the credit bureaus until the agreement is complete 3 and satisfied” (Paulson Decl. at Ex. B) support the finding that no modification was 4 intended and that NFCU’s reporting was accurate. Moreover, after this lawsuit was filed, 5 Bennett acknowledged that neither loan was paid in full. (See Hicks Decl. [Doc. 44-3] ¶ 6 5, Ex. 3 at Nos. 5, 6.) Thus, even if the terms of the repayment plans somehow modified 7 the original loans—which they do not—NFCU’s continued reporting of the outstanding 8 defaults would be accurate since neither repayment plan is “complete and satisfied.” 9 Finally, Bennett also contends that even if NFCU’s reporting was technically 10 correct, it was still misleading. (Opp’n at 10:4–12:17.) This argument is unpersuasive, 11 particularly given that there is no dispute that well after this lawsuit was filed, Bennett 12 remained delinquent on both the personal and auto loans. As Felts cautioned, “if the 13 Court adopted [Bennett’s] rule of law—that [NFCU] was required to report [his] 14 payments as timely because it instructed [him] to make lower payments [under the 15 repayment arrangements]—[Bennett’s] credit report may have been misleading to 16 prospective lenders, the report’s intended recipients.” Id., 893 F.3d at 1319. 17 For these reasons, NFCU is entitled to summary adjudication of the FCRA cause 18 of action. 19 20 B. Violation of the CCCRAA 21 To prevail on a cause of action for a violation of the CCCRAA, a plaintiff must 22 prove that “(1) Defendant is a ‘person’ under the [CCCRAA], (2) Defendant reported 23 information to a CRA, (3) the information reported was inaccurate, (4) Plaintiff was 24 harmed, and (5) Defendant knew or should have known that the information was 25 inaccurate.” Miller, 637 F. Supp. 3d at 855 (citing Robins v. CitiMortgage, Inc., 2017 WL 26 6513662, at * 14 (N.D.Cal. Dec. 20, 2017)). 27 28 1 For the reasons stated above, the Court finds NFCU did not report inaccurate or 2 || misleading information regarding Bennett’s personal or auto loan. Accordingly, summary 3 || adjudication of the CCCRAA cause of action is also warranted. 4 5 IV. CONCLUSION & ORDER 6 For the foregoing reasons, the Court GRANTS NFCU’s summary-judgment 7 motion [Doc. 44]. 8 IT IS SO ORDERED 9 || Dated: November 20, 2025 \

11 Hn. 1 omas J. Whelan 12 United States District Judge 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 12